Correlation Between Myomo and REMSleep Holdings

Can any of the company-specific risk be diversified away by investing in both Myomo and REMSleep Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Myomo and REMSleep Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Myomo Inc and REMSleep Holdings, you can compare the effects of market volatilities on Myomo and REMSleep Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Myomo with a short position of REMSleep Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myomo and REMSleep Holdings.

Diversification Opportunities for Myomo and REMSleep Holdings

-0.15

Correlation Coefficient

Myomo  REMSleep Holdings

Good diversification

The 3 months correlation between Myomo and REMSleep is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Myomo Inc and REMSleep Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REMSleep Holdings and Myomo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Myomo Inc are associated (or correlated) with REMSleep Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REMSleep Holdings has no effect on the direction of Myomo i.e., Myomo and REMSleep Holdings go up and down completely randomly.

Pair Corralation between Myomo and REMSleep Holdings

Considering the 90-day investment horizon Myomo Inc is expected to under-perform the REMSleep Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Myomo Inc is 1.3 times less risky than REMSleep Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The REMSleep Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  0.56  in REMSleep Holdings on December 19, 2024 and sell it today you would earn a total of  0.61  from holding REMSleep Holdings or generate 108.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Myomo Inc  vs.  REMSleep Holdings

Myomo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Myomo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Myomo is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

REMSleep Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REMSleep Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, REMSleep Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Myomo and REMSleep Holdings

The main advantage of trading using opposite Myomo and REMSleep Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myomo position performs unexpectedly, REMSleep Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in REMSleep Holdings will offset losses from the drop in REMSleep Holdings' long position.

The idea behind Myomo Inc and REMSleep Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.